The Federation of Automotive Dealers Association said on Friday that MG Motor India has become the country’s first automaker to accept its model dealership agreement, which gives retail partners an equal say in running the car sales business.
The association launched the Model Dealer Agreement (MDA) in September last year with the aim of reversing a traditionally “unilateral agreement” between automakers and their dealers and making their contract more balanced.
“Model Dealer Agreement is an important part of the new age dealer association and management that creates a level playing field for OEMs and dealers working together to offer Indian customers some of the most innovative, cutting-edge products and services.
“Nine OEMs have personally heard about the modern dealer agreement and we are pleased to report that each of them has responded very positively. I am pleased to announce that after two years of hard work, the MDA has been accepted by FADA and approved today by MG Motor (India), marking the beginning of the successful completion of the journey,” said Manish Raj Singhania, President of the Federation of Automotive Dealers Association (FADA), in a statement.
One of the main issues the MDA wanted to address was the fallout of foreign automakers leaving India and the resulting suffering of dealers.
When Ford decided to pull out of India in 2021, some dealers claimed they were caught off guard as the company had made statements of intent to set up new showrooms just a month before the announcement.
When General Motors left India in 2017, dealers were let down, claiming they suffered a loss of around Rs 1,000. However, the company had claimed that it was offering its dealer partners a fair and transparent transitional support package based on a methodology common to all dealers .
According to Singhania, the dealer network is a key component of the automotive ecosystem, which provides over 45,000 jobs and a large ongoing investment, as well as providing important revenue generation for states and central government.
With PTI inputs
